News & Views: 6/14 - 6/20

June 21, 2022

A group of Republican Representatives requested a GAO investigation into PBMs.

The members called on the GAO to study the role PBMs play in the pharmaceutical supply chain as the FTC begins a similar study into PBM behavior. The request calls the GAO to investigate PBMs in commercial plans, specifically the scope of services PBMs provide, how formularies and rebates impact prices, and what role fiduciary duty plays in PBM services. To read the full letter, click here.

The FTC announced a formal study of anticompetitive practices of Pharmacy Benefit Managers (PBMs).

The FTC has attempted to address PBM business practices in the past, including a vote to conduct a similar investigation this past February. The February investigation was thwarted due to lack of support by the commissioners, who voted 2-2 to conduct the investigation. This study will investigate six of the largest PBMs as part of the current investigation, including CVS Caremark, Express Scripts, Optum Rx, Humana, Prime Therapeutics, and MedImpact Healthcare Systems.  The investigation intends to examine the impact that vertical integration has on access and affordability of prescription drugs. To read the full announcement, click here.

The FTC held a two-day workshop on new approaches to address pharmaceutical mergers.

The workshop was the culmination of the Multilateral Pharmaceutical Merger Task Force, formed in March 2021 and was organized by the FTC and DOJ. The workshop included panel discussion addressing the various concerns that mergers and increased concentration in the pharmaceutical sector create as well as policy solutions. To view the workshop, click here.

A unanimous Supreme Court vote ruled that Medicare’s 2018, 2019 cuts to the 340B program were unlawful.

In 2018, HHS cut nearly 30% in Medicare outpatient drug payments to hospitals that participated in the 340B program. HHS argued that the cuts were necessary to maintain budget-neutrality, saying that if the cuts did not come out of reimbursements, they would have had to come out elsewhere. The Court ruled that since HHS did not survey hospitals’ acquisition costs before imposing cuts to the program violated protections against varying payment rates only for certain hospitals. The case will return to lower courts to make recommendations for hospitals that received the cuts. To read the full ruling, click here.

Researchers from PORTAL at Brigham and Woman’s Hospital analyzed drug launch prices from 2008-2021 in a JAMA Research Letter.

The researchers found that between 2008 and 2021, launch prices of new drugs increased exponentially by 20% each year. In 2020-2021, nearly half (47%) of new drugs were priced at more than $150,000 per year. These price increases were found to outpace the growing prices of other health care services. Researchers recommend that manufacturers no longer be permitted to freely set launch prices and that launch prices should be subject to negotiation. To read the full study, click here.

CIDSA Experts in the News

Rachel Sachs, Richard Frank, and their colleagues discussed ways that the FDA could increase generic competition in a Brookings Institution article. The authors focused on three different pathways that the FDA could take to promote competition: (1) the Citizen Petition mechanism; (2) the approval of complex-generics; and (3) by addressing generic “parking” under the Hatch-Waxman Act. The note that each of these policy changes has potential to generate significant savings through increased competition. To read the full article, click here.

Rachel Sachs spoke with reporters at Kaiser Health Network on drug importation regulations. Sachs explains how Senator Sanders’ proposed user fee amendment to promote drug importation from Canada and the UK goes further to include insulin and would compel manufacturers to comply with the importation, unlike the Trump administration rule. To read the full article, click here.

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